Armantier, Olivier
[VerfasserIn]
;
Ghysels, Eric
[Sonstige Person, Familie und Körperschaft];
Sarkar, Asani
[Sonstige Person, Familie und Körperschaft];
Shrader, Jeffrey
[Sonstige Person, Familie und Körperschaft]
Discount Window Stigma During the 2007-2008 Financial Crisis
Anmerkungen:
In: Journal of Financial Economics (JFE), Forthcoming
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments January 22, 2015 erstellt
Beschreibung:
We provide empirical evidence for the existence, magnitude, and economic cost of stigma associated with banks borrowing from the Federal Reserve's Discount Window (DW) during the 2007-2008 financial crisis. We find that banks were willing to pay a premium of around 44 basis points across funding sources (126 basis points after the bankruptcy of Lehman Brothers) to avoid borrowing from the DW. DW stigma is economically relevant as it increased some banks' borrowing cost by 32 basis points of their pre-tax ROA during the crisis. The implications of our results for the provision of liquidity by central banks are discussed